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by William Van Winkle |
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Sometimes, we pick words that make no sense. Consider the phrase "value monitor." As you know, this means a rock bottom display aimed at the supremely price conscious. Forget backlight MTBF, manageability, pivoting, fast response, or anything else. Value monitors turn on, display an analog image, and are cheap, cheap, cheap. For example, I'm looking at Newegg.com right now, and an SVA 17" LCD costs $189.99. The back of the monitor shows two holes for hanging on screws rather than a VESA mounting, and the buyer has to find eight dead pixels before SVA will consider refund or replacement. Over at Circuit City, a 19" Acer LCD with only 140-degree viewing angle and an error message where there should be a specifications page is only $275.99. That's value. |
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I'll confess publicly. Two years ago, I made the switch to dual monitors and purchased a pair of "value" MAG 19" LCDs after standing out in the cold for two hours on a Black Friday morning. The price was supposed to be a then unbelievably low $400 each after a flurry of instant and mail-in rebates but turned out to be more since I misplaced the rebate paperwork. Sitting next to each other on my desktop, the left monitor has a reddish cast while the right display is more greenish, even though I matched their color settings and pulled them off the same store shelf. Oh, and the one on the right started going through intermittent periods of fuzziness earlier this year. That's value, too. The phrase "value-add" means almost the exact opposite. Value-adds, of course, are features and enhancements made to a product to give it a higher level of quality and dollar for dollar functionality. You're not likely to see many value-adds in value monitors, but the market is full of low-cost, generic displays seemingly racing to shave away all possible margin and deliver the most minimal experience possible to the end-user. Even back in 2002, when we covered monitors in the channel, one Proview rep confided to us that "80% to 90% of the business is based on price alone." Such value displays are so prevalent than many customers (and more than a few resellers) have no idea what kinds of benefits there are to be had at the value-add end of the spectrum. This is where name brand vendors come into play. The Shamrocks, SMILEs, and KFCs of the world are long gone—for you newbies, those were value monitor brands—but major brands such as NEC and Samsung continue to thrive. This proves the point that one can rarely survive by bottom feeding. The technique of flooding the market with garbage in order to capture share is neither sound nor lasting. We've covered the technical side of monitors a couple of times in RAM already, focusing on speeds, feeds, and specs. This time, we're going to tackle the subject from the value-add angle by spotlighting six manufacturers who all recognize the strength and necessity of the reseller channel and work to make sure that their products offer distinctive feature sets able to solve customer problems rather than create them while making sure that display sales are a lucrative part of your business, not a low-margin headache. The Market The top monitors brands have their work cut out for them. Tier-ones such as Dell and HP have a broad assortment of house-branded units, although these are typically the bargain models. Bargain or not, the strategy works for them. DisplaySearch numbers for Q1 show Dell and HP with 38.8% and 9.1% of the North American LCD monitor market respectively. (Samsung follows at 5.3%, Acer at 5.1%, and Sony at 4.0%.) Add to this more house brands from distributors (Ingram's V7, for instance) and mass merchants (Circuit City's Liquid Video). Add to this monitor brands such as Sylvania and Westinghouse that historically have as much to do with LCDs as Eddie Bauer does with baby strollers and will likely vanish once the novelty of the brand wears off. Sylvania monitors are actually made by Proview, which, along with AOC, Sceptre, and a host of others, serve as perennial monitor brands on the market but at the lowest value segments. Naturally, you probably stock quite a few of these value brands. The consumer and SMB markets all but require it. But that doesn't mean bargain monitors should be your first choice on a bid or the image you opt to present in your showroom. This puts you back into the trap of trying to fight tier-one providers with tier-one tactics. It's no secret that the major OEMs have snagged some market share away from third-party monitor brands by bundling house brand displays with their PCs. But there are no value-adds in such models, and so you have no advantage over the tier-ones you're trying to beat. In 2005 more than ever, you cannot hope to win on price. The fourth quarter of 2004 and first quarter of this year saw massive price drops in LCDs as the OEMs tried to grab share with system bundles and the third-party brands lowered prices accordingly. Eventually, panel prices pushed down by unbelievably low street ASPs were running up against the cost of manufacture, which is why availability tightened in some segments during Q2 and upward price creep has been seen since in the least profitable areas, namely 15" and 17" LCDs. Nineteen-inch displays continue to ease downward in price, although the important point is that the market is critically saturated with low-end designs. A year ago, a 19" display was in itself a value-add over the de facto 15" or 17" models. Now, low-end 19" units sell for under $300, and manufacturers are cranking out 19" panels as fast as they can. DisplaySearch forecasts that more 19" LCDs shipped in Q2 of this year than 15" panels. In some ways, this is good for everyone. iSupply forecasts that LCD sales will rise to 93.6 million units in 2005, up over 58% from 59.2 million units in 2004. DisplaySearch pegs year-over-year LCD growth at 44 percent. Affordable 19" screens are playing a big role in this surge, although iSupply also points to the 23" and 24" widescreen market as a major growth opportunity. Additionally, LCD numbers continue to rise as they consume share from the CRT side. iSupply numbers show CRTs having still enjoyed 50% of the market in the fall of 2004, but that number will fall to under 20% by the same quarter of next year. Despite their chic image, DisplaySearch data for Q1 of 2005 show widescreens garnering only 1% of the market. This may reflect the relatively sluggish adoption of media center applications for desktop PCs and the fact that most users are inclined to run applications at full-screen regardless of whether that screen is 4:3 or 16:9. "Getting two or three monitors that display at the correct resolution is much more important than having one monitor that displays at a super-high resolution but reduces the fonts so much that you can't read them," says Andrés Maldonado, director of product marketing for NEC. "Also, we find that a lot of people like their information discretely separated, so if you're running two applications, you'd display each one on its own screen at full size." Said differently, many users still find two 4:3 monitors more productive than one 16:9, which is fine since selling two standard monitors is generally more profitable than selling one widescreen. "The market for 19-inch LCD monitors is positioned to more than double in volume sales worldwide in the next year alone," notes Chris Connery, vice president of market research at DisplaySearch. "With desktop LCD monitors forecasted to represent over 80% of the total monitors purchased in North America by the end of this year, name-brand vendors with quality assurance guarantees are best positioned to help achieve this penetration rate. Guaranteed picture quality is especially important in business environments where anomalies such as defective pixels can be mistaken for decimal places, periods and other seemingly subtle differences which are actually mission critical for all types of business tasks where electronic communication is becoming the norm." Notes On Quality We've covered the basics of conventional LCD specs previously. Suffice it to say that numbers stated on glossy product sheets should be viewed skeptically at best. Yes, the methodology in obtaining a display's luminance, measured in nits (also called candelas per square meter), is standardized, but there is still no protocol for assuring that the brightness is uniform across the screen or that a blazing 450 nits isn't obtained by sacrificing image quality. Far worse, contrast ratio numbers are all but meaningless as there is no standardized way to obtain light and dark measurements. DVI connectors often yield superior image reproduction over 15-pin D-Sub (VGA) and are capable of higher response times, never mind that coming DRM standards from Microsoft and others will all but require PCs to abandon analog video signals, so discussing analog quality is an increasingly pointless pursuit. One of the strategies employed by big brand monitor vendors looking to sell on the basis of quality is to claim that they only use A-grade panels, implying that lesser competitors use inferior B- or C-grade panels. This was certainly the case with the six vendors profiled in this article. But panel grading is not what you might think. The grades have nothing to do with backlight evenness, color accuracy, or even dead pixels. Rather, grading relates to the number and size of defects in the glass. According to NEC, top-grade panels will be free of particles or scratches measuring 10 microns or less when analyzed under a 10,000-lux light. A lesser grade might only screen out flaws in the 50 to 100 micron range when scanned under a 5,000-lux light. Manufacturers don't put panel grades on their spec sheets for several reasons, not the least of which is because some manufacturers claim to sell A-grade models, then mix in B-grade units to help drop overall costs, crossing their fingers that no one will notice the difference—and, truth be told, most of us can't. To the naked eye under regular conditions, many B-grade panels look as good as top A-grade panels, which is why the bargain brands make such common use of B-grade stock. Still, there are plenty of markets where the differences between A- and B-grade panels will be noticeable and customers will pay more for A-grade assurance. One term often discussed with but wholly separate from grading is pixel defect tolerance. As you know, each LCD pixel is comprised of three sub-pixels, one each of red, greed, and blue. Each sub-pixel is controlled by its own transistor. Thus a 1024 x 768 native resolution panel has 2,359,295 transistors, and it's not uncommon for at least one of these to develop a defect. According to the ISO 13406-2 standard, which is the benchmark everyone uses in this matter, there are four fault types for pixels or sub-pixels. Type 1 indicates an always-on pixel, most noticeable on a blank, black background. Type 2 is the opposite, a dead pixel that shows as dark on a light background. Type 3 is anything besides these two, such as an intermittent fault, and a "fault cluster" is any instance of two or more pixel faults within a 5 x 5 pixel area. When vendors throw around 13406-2 adherence, it's important to note which class they mean. There are four classes, each pertaining to the maximum number of faults per million pixels. Class I is perfect, showing no bad pixels at all. Class II allows for up to two Type 1, two Type II, and five Type III faults. Class III allows for up to five Type 1, 15 Type II, and 50 Type III defects, and Class IV is significantly worse. (Interestingly, ISO 13406-2 is a 147-page document, only part of which deals with pixel defects, yet this is all you ever see discussed by manufacturers and marketers.) Philips is the only manufacturer I've found yet that bases its warranty (for select models) on Class I adherence, with no tolerance for defective sub-pixels. Most top-brand manufacturers stick to Class II. And watch the terminology out there. A "zero pixel defect policy" can and usually does mean three adjacent, defective sub-pixels. Obviously, the odds of having such a cluster are quite remote. BenQ Despite the company's size and product range, BenQ is still surprisingly underappreciated as a major brand, but some of that is its own doing. In order to gain market share and recognition, BenQ spent a lot of early effort in pursuing low price points, and this may have inadvertently lumped its products in with the Sceptres of the world more than the Samsungs. Many reviewers certainly seemed to follow this preconception.
As we've discussed before in a home theater context, getting a digital display properly set and calibrated is essential to gauging true quality, and BenQ, while definitely not alone in this regard, has not always been assiduous in making sure that its default LCD settings showed the displays off to their best advantage. BenQ models are particularly good with showing deep blacks and vibrant colors, but it may take some tweaking to show them properly. Fortunately, BenQ's on-screen display (OSD) menus are fairly intuitive and easy to navigate, so optimization with some basic utilities is straightforward. Another risk BenQ has taken is with overall design. Several of the company's LCD models aim for greater stylistic flare than conventional designs. Often, BenQ builds with more curves than the competition. At the extreme, the 17" FP785 (known inside BenQ as "The Purse") stands wholly apart from every other desktop monitor. The base is made of two hinged D shapes. When positioned at 90 degrees to the panel, the two Ds form a circular base. When folded together, they make a carrying handle or hanger so that the display can suspend from a wall peg. Built-in sensors can determine the screen's orientation and pivot the image 180 degrees accordingly. The bottom bezel—which is covered in burgundy red fabric, by the way—houses a circular liquid chamber with a floating BenQ logo that echoes the "this way is up" idea. Personally, I had a hard time keeping a straight face in front of company reps when I first saw the FP785 at BenQ's California office. I'm used to looking at fashion displayed on monitors, not monitors that are fashionable, and the idea seemed a bit far-fetched to me at the time. However, the more I thought about it, the more the idea grew on me. Provided that display quality isn't traded for cosmetics, anything that can help resellers differentiate their monitor offerings from the third-tier masses in a positive way and perhaps solve some customer needs in the process is a good thing. "A lot of our product designs try to create something that really has an image and personality of their own so that people can associate it with their everyday lives," says BenQ's Andy Weis, product marketing manager for LCD monitors. "Rather than just create a product that's based on function alone, we want something that reflects someone's personality and what they do in their everyday life. Whether its functional or applicable across a wide audience, it's still something that people can connect with." Another big advantage with a growing number of BenQ models is the company's Senseye image enhancement technology. According to BenQ, Senseye works by first converting RGB signals into YUV, which is closer to the color model used by the human eye than RGB. The YUV signal is then separated into luminance (Y) and two chrominance (U and V) channels. Senseye components analyze and enhance these channels individually, boosting contrast and color respectively, then recombine them back into a YUV stream. This stream gets run through an image sharpening engine, then finally converted back to RGB for output. While at BenQ, I got to see Senseye at work in a before-and-after split-screen configuration. On a few images, I had to peer pretty closely to tell any difference, but with most samples, the difference was remarkable. Colors with Senseye were much richer, and the contrast enhancement helped landscape details, for example, become more noticeable. Without question, running such a side-by-side demo on a Senseye-enabled monitor, especially with a cheap tier-three screen alongside the "before" image, would be a tremendous upselling tool. Luckily, BenQ makes such demonstrations easy. "Most of the big brands out there have some version of what we call Senseye," says BenQ's Weis. "But what makes us unique is that a reseller can take Senseye products out to a client, put it on demo mode, and actually show customers what Senseye looks like and offers using the customer's own images. Our competitors may or may not manipulate the demo images they show. But with ours, we can use your own images, put them in a CPU, and tangibly show the Senseye difference and value-add on the fly."
Thankfully, the FP785 is about more than style. The Senseye-fueled output I witnessed on the svelte 17" looked surprisingly good. BenQ promises in its literature that all FP785 units use A-grade panels, which is quite believable given that BenQ is one of the few monitor vendors that makes its own panels. (This start-to-finish vertical integration is also part of what enables BenQ to often hit lower than expected price points versus similar quality displays.) The FP785 features a 170-degree viewing angle, 600:1 contrast, and 250 cd/m2 brightness. Net weight for those who really want to tote it like a purse is only 11 pounds. Another strong channel play from BenQ's lineup is the brand new 17" FP72V, which also features Senseye. Built with the increasingly common (and very cool) Z-hinge design for better control over display height, the FP72V adds a specialized glass coating to help stretch panel longevity. BenQ is now applying this coating to several of its premium LCD models. Additionally, there is a small hole in the top-left corner of the bezel behind which sits an ambient light sensor. This is a clever technology borrowed from high-end notebook displays that dynamically adjusts brightness according to ambient light levels. Obviously, you need less luminance in a dark room than a brightly lit one, and this feature saves users a lot of manual adjusting or divining how to create preset modes. BenQ adds a pair of surprisingly attractive clip-on 2W speakers and a top-center mounted Web cam to appeal to multimedia enthusiasts as well as low-end corporate videoconferencers. Personally, I'd like to see BenQ offer upgrade options for these bundled items—say, 5W speakers with a slim subwoofer and a higher-resolution Web cam—but having this bundle at all is a great advantage over the tier-three SKUs. The FP72V sports excellent specs: SXGA resolution, 1,000:1 contrast, VGA and DVI connectors, and quite acceptable 280 cd/m2 brightness. A three-port USB hub is even integrated into the base. The only things that could use improvement here are the omission of VESA wall mounting compatibility and a 25 ms response rate. This last point is unlikely to disturb corporate buyers, but it may be a hindrance to selling some multimedia enthusiasts attracted by the Web cam and Senseye.
Also note that the FP72V is one of BenQ's models covered by the company's three-year warranty, the first year of which offers 48-hour hot swap service. Best of all, BenQ pays for shipping both ways on the hot swap. This level of warranty support to end-users is very rare in the industry and indicates both BenQ's confidence in its products as well as its commitment to building a loyal user base. In fact, BenQ's Andy Weis notes that the company's overall failure rate is under one percent, significantly less than numbers I've heard quoted from some tier-three sources. Just as important as these quality issues is BenQ's allegiance to the channel. The company refuses to sell direct and keeps phone support here in the U.S. rather than outsourcing it abroad. The Qrewards channel program (www.q-rewards.com) offers the usual assortment of marketing tools and materials as well as great perks ranging from 20% off demo units to SPIFs paid out on MasterCard debit account cards. BenQ is very fond of running incentive promotions on new and end-of-life SKUs, and the company is increasingly looking for ways to tighten relations with channel partners of every size, not just the large nationals. "We're launching a new lead referral program right now that will tell us roughly which resellers in our program have product at any given time," says Weis, "and we can immediately send customers to those guys and put them in front of this huge bundle of leads we're getting from our Web site—that's 11 million potential sales leads each month. In the past, we've mostly sent those leads to the larger online guys and retail stores. Now, this will help narrow the inventory gap between small resellers and distribution."
Having experienced many occasions when a vendor would monologue about preserving reseller margins while I discovered on Pricewatch that its products were available online at sub-distribution prices, I've also been very impressed by the lengths BenQ goes to in order to keep partners competitive and profitable. "Because of the various benefits of our Qreseller program," notes Weis, "we allow small resellers to have some advantage over even our e-tail/retail partners by way of our bid desk, SPIFs, and other special programs. Price integrity is a very big deal to us. I mean, we find an unbelievable number of people who will regularly do bait-and-switch, who pull their info from distribution and post it only for sale at the disty price. Normally, they turn out either to not have that item in stock or call to say it's sold out or whatever. Right now, we're trying to find some legal grounds to combat that. That's very time-consuming for us, but we're very concerned with how the practice erodes margins and takes away leads from the resellers we know are supporting us." ...more |
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